Keynote speech by H.E. Mr Martti Ahtisaari, President of the Republic of Finland

Jakarta, January 19, 1995

I am pleased to have the opportunity to address this distinguished audience of leaders of Indonesian business and industry.

I am equally pleased to note that our relations with Indonesia have always been most cordial. It is quite natural that our countries differ in several ways, due to the huge geographical distance between us. Indonesia is one of the biggest countries in the world, while Finland is one of the smallest. The climatic conditions are quite different. But - surprisingly enough - our languages have certain similarities. Some words in Bahasa Indonesia mean exactly the same thing as in Finnish, for instance, "sama suku". I am thus especially glad to be among "sama suku" today, to discuss opportunities for further expanding and intensifying our relations.

Over the years, the relations between our countries have developed well and cooperation has spread to many fields. The main emphasis for quite some time now has been on commercial and economic activities.

In recent years, Indonesia has become one of Finland's most important trading partners in Asia. The trade in goods between Finland and Indonesia has grown many times over. In 1993, the value of Finnish exports to Indonesia was about 240 million US dollars, while in 1986 the corresponding figure was still only 28 million. Also, Finland's imports from Indonesia have been increasing for several years, though not at the same pace as exports.

I believe that Finland has plenty of advanced technology well suited to the vast infrastructure projects going on in Southeast Asia. Finland is very competitive, and a world leader, precisely in the sectors where demand in Indonesia is now strongest, namely in telecommunications, energy, forestry, the wood industry, environmental technology and shipbuilding. High-technology or technology-intensive products make a major contribution to our exports here. This is not surpirising: R&D-intensiveness and export-orientation are among the key characteristics of many of our enterprises.

For obvious reasons, forestry is the field of industry in which the Finns do not need to introduce themselves anywhere in the world, and in particular not in Indonesia. I have been told that forestry professionals here can quote the names of several Finnish experts offhand. Finland and Indonesia have been cooperating in the forestry sector for many years now. The role of forestry is vital for both countries in the global context. Also, we realize in Finland as well as you do in Indonesia that environmental factors are crucial elements in forest policy.

Ladies and Gentlemen,

Finland became a member of the European Union at the beginning of this year. It was our greatest political decision since the Second World War. We Finns are a thoroughly European nation. For centuries, we have interacted with both West and East. Our democracy, legal system and culture are anchored in the Nordic tradition. Our economic system has always been based on a market economy, private ownership and the entrepreneurial spirit. Against this background, it was only natural that Finland wanted to join the main European organization representing the same values.

Joining the EU was essential for our export industry and for our economy in general. Finland's most important trade partners and main markets have always been in Western Europe. As much as 60% of our exports go to the single European market. But at the same time - bearing in mind its dominant sectors - our industry must operate globally. Asia, and especially its most dynamic regions East and Southeast Asia, is therefore of utmost importance for Finland and for Europe in general.

During the past 25 years, Indonesia's economy has witnessed impressive growth and has also become increasingly integrated into the international marketplace. It is obvious that Indonesia, together with the other countries in the region, is developing into an economic power comparable in every respect with Europe and North America.

We Finns find this vision of the future a most promising one for the world economy as a whole. Finland is a strong proponent of an open multilateral trading system. We worked actively for the success of the recently concluded GATT round, and resisted manoeuvres that could in one way or the other undermine the progress towards free trade. We must, however, recognize that we will be dealing with complicated issues within the framework of the WTO. For instance, we certainly support efforts to improve labour standards and standards of environmental protection, but we remain firmly opposed to attempts to turn these efforts into protectionism of one sort or another.

Parallel with developments in the GATT/UR, we have been following with keen interest the plans and recent initiatives in the field of regional economic cooperation and integration in Asia. Indonesia has played a prominent role in the APEC process, as the host of the recent summit. The Bogor Declaration paves the way for the future development of the Asia-Pacific region. We welcome the liberal spirit in which these initiatives are being envisaged and implemented: instead of creating barriers, they seem to aim at facilitating market access. Thus they effectively complement the GATT and the WTO, a development that I believe will be in the interest of us all.

Ladies and Gentlemen,

As you might be aware, Finland experienced an economic recession in recent years, but strong recovery is now under way. The GDP growth estimates for this year are already between 5 and 6%. Our import demand is also expanding briskly.

I am convinced that the accession of Finland to the European Union improves the prospects for sound and dynamic development of the Finnish economy. As a member of the Union, Finland commits itself to the common economic and monetary goals of the EU, a fact which will make our economic policy more credible. The lucrativeness of Finland as a base for economic activity will increase now that we are an integral part of the most important common market in the world. These factors will lead to lower interest rates and strengthen the Finnish currency, which will in turn accelerate both domestic and foreign investment.

The very substantial changes that have taken place in recent years in the geoeconomic and geopolitical location of Finland have created new business opportunities for overseas companies there. Our membership of the European Union means that, through Finland, foreign companies now have unlimited access to a huge single market of nearly 400 million people. The new 'Northern Europe', which comprises not only the Nordic countries but also the western parts of Russia and the Baltic republics, offers huge future potential to foreign businesses and businessmen. The overall population of the area is about 70 million.

Europe and Asia, and in particular the European Union and the ASEAN region, have developed an interdependence of great value also on a global scale. This enhances security, development, the economy and human rights. As a new member of the EU, Finland encourages intensified cooperation with Asia. The EU's new Asian strategy provides a good basis for developing a more balanced partnership which also takes into account and respects differences between national cultures and traditions. In many respects, this dialogue and the wide-ranging cooperation between the EU and ASEAN can be regarded as an essential driving force in strengthening ties with Asia.

Ladies and Gentlemen,

As to the future outlook, there is, in my view, still much more potential on both sides which should be tapped. Therefore, I am especially glad that so many Finnish companies are represented in my delegation. These companies are already familiar with the existing business potential here, but I hope that this meeting will yield new ideas and provide opportunities for personal contacts at the highest corporate level, and thus give a new boost to cooperation

between the industries of our two countries.

Economic interchange between Indonesia and Finland has been an evolutionary process. In addition to traditional terms of trade, more advanced and diversified types of economic and industrial cooperation have emerged and developed. The interest felt by Finnish companies in establishing themselves in Indonesia is growing all the time.

There are already several encouraging examples of joint ventures between Finnish and Indonesian companies, for instance, in the forestry, paper and plywood industries, energy, cold storage and consultancy. In addition, a number of sophisticated new joint ventures can be expected to emerge in various other sectors, such as the forest industry in general, telecommunications, metallurgy, the chemical industry and environmental technology. In all these sectors, Finnish companies have extensive experience in conditions similar to those in Indonesia.

We have come to Indonesia in order to enhance mutual understanding between potential business partners of our two countries. I am pleased to announce in this context that the Finnish industry is ready to offer new scolarships for younger Indonesian undustrial leaders. The idea is to give them the opportunity to get acquainted with advanced Finnish technologies and related businesses in Finland. It is my sincere wish that this offer will attract interest among younger Indonesian industrial leaders in Finnish high tech areas with close relation to international business life.

Ladies and Gentlemen

Let me now propose a toast to your health and well-being, to the continuous prosperity of the Republic of Indonesia and its people, and to the further development of relations between our two countries.